Commercial Reports


Economic & Commercial Report – APRIL 2012

Overview
International Monetary Fund (IMF) in its World Economic Outlook report forecasts that in 2012 Kazakhstan’s real GDP growth will be around 5.9%, reaching 6% in 2013. In a recent estimate, foreign trade between Kazakhstan and the Customs Union in 2011 grew by 40.8% to reach $24.526 billion, with exports standing at $7.618 billion (43.1% up) and imports standing at $16.908 billion (39.8% up). In Kazakhstan the number of Russian companies has increased by 30 percent since creation of the Customs Union.

 

Macroeconomic Situation in Kazakhstan

The 12-month inflation rate in Kazakhstan has reached 14-year minimum as of April 2012. As of April 1, it was 4.6 percent. According to Kazakhstan's Statistics Agency, inflation was 0.3 percent in March 2012 (vs 0.5 percent in March 2011). Pursuant to this,  Kazakhstan’s National Bank slashed its key rate from 7% to 6.5% in late March.

A total of 36 600 unemployed people were registered with state-run employment agencies as of the end of 2011. The number of actually unemployed people has been estimated to be  473,000, with the unemployment rate standing at 5.4% (0.4% lower against the end of 2010). The share of men in the figure stood at 43.3%, with women accounting for the other 56.7%
Monetary & Fiscal Situation

Kazakhstan’s net international reserves (excluding assets of the National Oil Fund) in March 2012 decreased by 8.79% against February, to  $31.753 billion, with the figure growing by 10.39% since the start of the year.   The net international reserves figure are believed to have decreased due to sales of $1.5 billion to the National Oil Fund by the National Bank. In February the Bank purchased $1.2 billion, purchasing another $200 million in March. In the Q1 2012 the net currency interventions amounted to $1.4 billion. The National Bank’s FX assets in March, were $27.155 billion, 9.7% down against February. The Bank’s assets in gold decreased by 2.77% to $5.134 billion.

Power Sector

According to Timur Zhantikin, Head of the Nuclear Industry Committee within the Ministry of Industry and New Technology, Kazakhstan is considering construction of a possible nuclear power plant in the South of Kazakhstan.  The first option is Balkhash Lake, and the other being the South Kazakhstan hydropower unit in the energy-hungry southern part of the country. By 2030 Kazakhstan plansto generate approximately 4-4.5% of power from nuclear plants. In 2011 Kazakhstan’s Government had adopted a program to develop the national nuclear industry.

The deal enabling KazAtomProm National Nuclear Company to purchase a stake in the Uralsk Electrochemical Works [part of RosAtom], the largest uranium processing company in the world, is likely to be finalized by the end of 2012. It is expected to cost Kazakhstan approximately $400-500 million.  The size of the stake hasn’t been defined yet but could be approximately in the range of 30% and 49%.

Samruk-Energo, subsidiary of Samruk Kazyna Sovereign Wealth Fund, has finalized its deal with Samsung of South Korea to sell its 75% minus one share stake in the Balkhash thermal power plant to be jointly constructed on the south-west shore of the Balkhash Lake close to Ekibastuz coal mine.

Oil & Gas Sector

 

KMG has significantly decreased the number of management levels to avoid duplication of authorities and to clearly divide responsibilities of managers. As a result of the optimization, the administrative staff of KMG headquarters was cut by 47.8 percent and the number of top management went 26 percent down overall.

$202.7 million will be allocated out of the National Oil Fund to finance construction of the first stage of the $6.3 billion project to construct the integrated gas treatment and chemicals production complex in Atyrau. The first stage worth $2 billion is to be completed in 2014 in partnership with Sinopec Engineering of China. The second stage will be completed in partnership with LG Chemical, the largest Korean chemical company, on a parity basis.

Industry & Corporate Developments

Kazakhtelecom (national telecommunications company) will construct the biggest Data Processing Center in CIS in Pavlodar. Data Processing Center (DPC)  will be situated in the area of 1000 square meters. It will be equipped with servers for data processing and storage and will systematize and reserve the data for Internet resources, register new domain names and provide both virtual and physical services.

Agriculture

European Bank for Reconstruction and Development (EBRD) has purchased 61,280 common shares in the Kazakhstan-based KazExportAstyk grain production company for $45 million. The EBRD’s investment will consist of an equity investment via subscription to newly-issued share capital of KEA worth US$ 45 million. The proceeds of the investment will allow KEA to strengthen its balance sheet structure and position it better for future strategic growth.



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